Contractors group sues over bidding law

An association of construction contractors has challenged an Allentown law that requires nonunion bidders on city projects to hire most of their workers from union halls and abide by union rules.

The eastern Pennsylvania chapter of Associated Builders and Contractors filed a lawsuit Monday in federal court in Allentown asking a judge to bar enforcement of the law when the city awards contracts Nov. 1 for a streetscape improvement project.

The lawsuit also seeks a declaration that the city's law is unenforceable under any circumstances because it conflicts with federal labor law and the U.S. Constitution's provision that federal statutes trump state and local laws.

The organization, joined by builders F.H. Rohrbach of Allentown, A.J. Trunzo of Bath, and Engelman Construction of Macungie, argues that the law city council passed in December violates the National Labor Relations Act by interfering with private employers' right to negotiate with their employees.

The law applies to city-sponsored projects that receive state or federal support and cost more than $250,000, excluding engineering and architectural costs. Builders seeking contracts on such projects are required to sign project labor agreements.

"The Allentown ordinance is a radical departure from the types of laws courts have previously allowed," said Jeff Zeh, the group's president and CEO, noting that most project labor agreements are narrowly tailored to a single project.

City Council President Michael D'Amore said he expects the city ordinance to withstand the court's scrutiny.

"We put it through a thorough legal vetting," D'Amore said. "We are confident that this is not a violation of any federal or state labor law that currently exists."

Allentown spokesman Michael Moore said city officials had not had an opportunity to review the suit and declined to comment.

The Arts District Streetscape Enhancement project is a $3 million plan to install new sidewalks and other amenities in the emerging arts and entertainment district around 19th Street. The city and the state will each pay $1.5 million for the project, which was advertised for bids earlier this month.

Zeh said the Associated Builders and Contractors, which represents more than 500 companies in Eastern Pennsylvania, chose the streetscape project to challenge the law because several members had been interested in bidding.

"Many of them have done work for the city for many years and now we're confronted with an artificial mechanism that prevents them from bidding on these projects, which we feel is unfair and un-American," Zeh said.

Zeh said the ordinance will keep nonunion contractors from bidding on future construction projects as well, although it was unclear whether the city's proposed 8,500-seat hockey arena would be covered by the law.

"We've had meetings on that very subject and no one seems to know," Zeh said, declining to say with whom his organization has met.

D'Amore said he doesn't believe the ordinance would apply to the arena because the Allentown Commercial and Industrial Development Authority is the project's owner and is not bound by the city's bidding rules. The arena, planned for a city block at N. Seventh and Hamilton streets, is expected to cost more than $100 million to build.

Sarah Hailstone, Allentown's director of community and economic development said in her assessment, the ordinance doesn't apply to the arena project.

Matt Hoffman, a Pittsburgh attorney who has defended school districts that sought to place project labor agreements on construction jobs, said Pennsylvania courts have routinely upheld such requirements, finding they serve the state law's goal of awarding contracts to the lowest responsible bidder.

Under the city's project labor agreements, nonunion contractors who submit a low bid would be required to hire all but 10 percent of their workforce designated as "core" employees from local union labor pools, be bound by union grievance and arbitration procedures and make contributions into union benefit funds.

Zeh said the law is bad for taxpayers because it precludes a majority of contractors and their employees from competing for city construction jobs. Only two out of 10 construction trade workers in Pennsylvania are represented by unions, Zeh said.

"It's really a taxpayer issue because the extent to which you limit competition by use of a [project labor agreement], you will tend to drive up the price of a project," Zeh said.

"We're not interested in having a monopoly like the unions are. The work should go to the lowest responsible bidder. If that's the case, it should go to a blend of union and open shop contractors," Zeh said.